Arkansas LLC

Last updated on March 1, 2023

Limited liability companies can be a great vehicle for entrepreneurs in Arkansas. Learn how to form an LLC in the state and how to maintain it once it's established.

$45

Formation fees

$22.5

Name reservation fees

$150

Annual report fees

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What is an LLC?

Limited Liability Company

LLC is a business entity in the U.S that provides limited liability to its members. It has characteristics from both corporation and sole proprietorship. LLCs are permitted under State statutes of each US state.

Limited liability

Personal assets are protected for people with limited liability when they are sued.

Corporation

A business entity that can issue shares and give limited liability to shareholders.

Members

Owners of an LLC are referred to as members. They own membership interest in the LLC.

Sole proprietorship

Where an individual engages in business activity without formal organization.

Types of LLC

Depends on the number of members and whether it has elected to change its IRS classification.

Single-member LLC

Has only a single member. IRS considers it as a sole proprietorship for tax purposes.

LLC as C-corp

Owners of an LLC are referred to as members. They own membership interest in the LLC.

Multi-member LLC

Has two members. IRS considers it as a partnership for tax purposes.

LLC as S-corp

A special election for a maximum of 100 US shareholders.

Actions

Here are some common actions in a Arkansas LLC. Click on any of the actions below to read the steps:

How to form an LLC in Arkansas?

Follow these 7 steps:

1. Name your LLC

Pick out a few names for your business that you think your customers would find appealing. Ask a few friends and some customers what they think of those names. If you already have a name in mind, great!

To check if those names are available in the state of Arkansas, go to the official entity search tool on the Secretary of State website. It’s free to search.

After you reserve a name for your business, your reservation will be valid for a specified period of time. If you file your Articles of Organization with your state's Secretary of State, you do not need to reserve a name separately.

Reservation fees

$45

Reservation duration

48 hours

LLC’s are required to have a designator in their name. You can use ‘Limited Liability Company’, ‘LLC’, or ‘L.L.C’

Make sure you follow LLC naming guidelines specified by Arkansas state as per AC §4-32-103. This includes not using names similar to existing companies, etc.

2. Get a mailing address

If you have a factory or office in Arkansas, that can be your official corporate address. You may also use your home address, if desired.

You can also pick a virtual office address. This way, you pay a company for a street address and they handle all your mailing.

3. Hire a registered agent

If you are a resident of Arkansas and want to be the registered agent for your LLC, you can do that. However, your name and address will be made public, and you must be available during all business hours to receive service of process.

If you don't want to go through the trouble of maintaining your own corporate address, then there are companies that provide registered agent services. These companies handle a corporation's legal needs, including its address, on a fee basis.

4. File Articles of Organization

Once you have registered your business with the state and obtained an official office address, you can file it online on the Arkansas SOS Corporations Online Filing System website.

Filing fees

$45

Processing time

48 hours

Address

Arkansas Secretary of State

1401 W. Capital Ave.

Suite 250

Little Rock, AR 72201

5. Create an Operating Agreement

Operating agreements are not mandatory in Arkansas, but you should consider creating one. There are online websites where you can create an operating agreement and get it signed by all LLC members.

6. Get Employer Identification Number (EIN)

The IRS uses an Employer Identification Number (EIN) to identify businesses. You can create an EIN for free at the IRS website.

7. Open a business bank account

When you run a business, it's important to separate your personal and business finances. There are several ways to set up a business bank account. You can open a business checking account at a traditional bank like Chase or Wells Fargo, for example. Or you can use one of the many modern banking options that offer plenty of benefits to small businesses.

Entity name

Every LLC should have a unique name in Arkansas. Arkansas maintains a list of names of entities in the state. Go through it to check if your chosen name is available.

Search for names

Go to the official website of the Arkansas business entity search tool to see if the name you want is available.

Searching fee

Free

Reservation

You can reserve a name for your LLC for a specific duration by paying reservation fees to the Arkansas business & commercial services. You will have to file your LLC formation documents within this period to keep the name. Alternatively, you can directly go ahead with the LLC formation without any reservation. That's fine too.

Reservation fee

$23

Reservation period

120 days

LLC naming guidelines

The name you choose for your LLC must the official naming guidelines.

Here are some of the guidelines in simple language:

  • 1

    Must contain the words "Limited Liability Company" or "Limited Company" or the abbreviations "L.L.C.," "L.C.," "LLC," or "LC." The word "Limited" may be abbreviated as "Ltd." and the word "Company" may be abbreviated as "Co."

  • 2

    Don’t include terms that indicate that you are doing an activity that you are not authorised to do.

  • 3

    Your name should be ‘distinguishable’ in the Secretary of State records. Adding a punctuation or ‘the’ does not make it distinguishable.

  • 4

    Don’t use words that makes it seems like you are a governmental entity or has an affiliation.

Articles of Organization

In Arkansas, Articles of Organization is the form you file with the Secretary of State to form an LLC. It contains the articles of formation for the LLC.

Filing Articles of Organization

There are a couple of ways to file

  • File it online on Arkansas SOS Corporations Online Filing System website

    Visit

  • Mail a form to the state department

    PDF

Address

Arkansas Secretary of State

1401 W. Capital Ave.

Suite 250

Little Rock, AR 72201

Online fee

$45

Online processing time

48 hours

Mailing fee

$45

Mail processing time

14 days

EIN

An Employer Identification Number, also known as Federal Tax Identification Number, is used to identify a business entity.

Who must have an EIN?

  • Single member LLC elected to be taxed as C-corp or S-corp

  • Single member LLC with an employee

  • All multi-member LLC

How to get an EIN?

  • Visit IRS website to apply for an EIN online.

    Visit

  • Alternatively, you can mail or fax Form SS-4 to the IRS

    PDF

Address

Internal Revenue Service


Attn: EIN Operation


Cincinnati, OH 45999


Fax: 855-641-6935

Registered agent

A registered agent is an agent of your LLC on whom any notice, process or demand may be served. Every LLC in Arkansas needs to have a registered agent located in the state.

Requirements

According to Arkansas Code § 4-20-101 - § 4-20-118:

  • 1

    Registered agent can be an individual or an authorised organisation.

  • 2

    Registered agent must have a street address where they can personally receive service of process.

  • 3

    Office of Registered agent cannot be just a mailbox service of a telephone answering service.

LLC Annual Franchise Tax Report

Every LLC has to file this report in Arkansas to stay compliant with the state laws.

Filing Annual Franchise Tax Report

Arkansas LLC is expected to file this report annually by may 1

  • File it online on Department of Finance and Administration, Arkansas Secretary of State website

    Visit

  • Mail a form to Department of Finance and Administration, Arkansas Secretary of State website

    PDF

Address

Arkansas Secretary of State

1401 W. Capital Ave.

Suite 250

Little Rock, AR 72201

Online fee

$155

Online processing time

1-2 weeks

Mailing fee

$150

Mail processing time

1-2 weeks

Failure to pay

There is a penalty fee of $25 plus an interest calculation on the form

Note

It is $150 +$5 fee to file online. The fee is actually annual franchise tax.

Operating agreement

Operating agreement is an internal business document that outlines the general rules and policies of the LLC.

Importance

It is not a legally mandatory document. However, it is recommended to have one since many courts, banks and financial institutions use it for verification. It is also nice to clearly outline the duties and relations between multiple members of an LLC—so you avoid any confusion in the future.

Format

There is no ‘required’ format for an operating agreement. You can include anything reasonable in it. In general, it has the following sections:

Basic Business information

Contains name, address, names and details of members, purpose

Member relationship

Contains membership interest, decision making process, powers, duties.

Membership transfer

Contains details on how to add or remove members and managers.

Accounting and tax

Contains details on how company records and distributions are maintained.

Dissolution

How to dissolve, wind up and terminate, due process to follow and exceptions.

LLC in Arkansas

Although many businesses in Arkansas choose LLCs, numerous other business entities are available to entrepreneurs in Arkansas.

Arkansas Business search

Arkansas LLC add member

Arkansas LLC remove member

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StartGlobal: Legal + Taxes + Bookkeeping for solopreneurs

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Why we like StartGlobal?

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Willy Justin

Founder, Statepedia

StartGlobal: Legal + Taxes + Bookkeeping for solopreneurs

Product

For small businesses, managing taxes, accounting and everything legal is just a pain. Nobody wants to do it, but they have to. Instead of working with CPAs, attorneys and others separately, Start brings all of them under a single subscription. It’s just smooth.

Team

I know the team behind StartGlobal very well. It’s a very hardworking group of individuals who are genuinely passionate about small businesses. They are backed by successful founders like Balaji Srinivasan, Biz Stone(Twitter) and others.

Price

Getting a CPA or attorney is a matter of thousands of dollars. It’s just unfair to pay so much when you’re a small business. Start has a single subscription that covers it all. It is a definite money saver.

$599 one-time